Legislature(2025 - 2026)BELTZ 105 (TSBldg)
02/03/2025 01:30 PM Senate LABOR & COMMERCE
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| Audio | Topic |
|---|---|
| Start | |
| SB14 | |
| SB77 | |
| SB73 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| *+ | SB 14 | TELECONFERENCED | |
| *+ | SB 73 | TELECONFERENCED | |
| *+ | SB 77 | TELECONFERENCED | |
SB 14-AIDEA FINANCE WORKFORCE HOUSING DEVELOP.
1:33:18 PM
CHAIR BJORKMAN announced the consideration of SENATE BILL NO. 14
An Act relating to the Alaska Industrial Development and Export
Authority; and relating to workforce housing development
projects."
1:33:42 PM
SENATOR DUNBAR speaking as sponsor presented an overview of SB
14. He stated SB 14 was called Senate Bill 239 in the previous
past legislature and allowed the Alaska Industrial Management and
Export Authority to provide loans for certain multifamily
housing construction. He stated that HB 14 is a tool to help
people access financing and build housing.
1:35:09 PM
HAHLEN BEHNKEN, Staff, Senator Forrest Dunbar, Alaska State
Legislature, Juneau, Alaska, provided the sectional analysis for
SB 14 as follows:
[Original punctuation provided.]
SECTIONAL ANALYSIS
SB 14: AIDEA FINANCE WORKFORCE HOUSING DEVELOPMENT
Section 1: AS 44.88.070: Adds a new subsection 7 to AS
44.88.070 which states the purpose of the authority.
Providing means of financing and facilitating the
financing of construction of new workforce housing
facilities with five or more units will now be part of
the mission of AIDEA.
Section 2: AS 44.88.080: Adds a new subsection 33 to
AS 44.88.080 stating the powers of authority. One of
the powers of AIDEA will now be to provide means of
financing and facilitating the financing of
construction of new workforce housing facilities with
five or more units.
Section 3: AS 44.88.900(6): Extends the definition of
"development project" to include workforce housing
facilities with five or more dwelling units, as
defined in the new section J of AS 44.88.900(14).
Section 4: AS 44.88.900(14): Adds a new section J to
include workforce housing in the meaning of "project"
under AS 44.88.900(14)
Section 5: AS 44.88.900: Adds a new subsection 22 to
AS 44.88.900 defining "workforce housing". Workforce
housing will be defined as residential housing that
costs the occupants less than 30 percent of the income
of a household with 120 percent of the area median
family income, as determined by the United States
Department of Housing and Urban Development.
1:36:51 PM
SENATOR DUNBAR mentioned that he talked with AIDEA and Alaska
Housing Finance Corporation to avoid overlapping efforts and
both organizations were supportive of SB 14. He said AIDEA had
already taken similar initiatives back in the 80's that aligned
with SB 14. He emphasized that AIDEA has the power, and the
legislature wants the agency to use the power they have. He
stressed that major projects in Alaska cannot move forward
without addressing housing needs and expressed hope that housing
development would become a key part of AIDEA's strategy to
support industry growth in the state.
1:38:21 PM
SENATOR GRAY-JACKSON asked if SB 14 passed would AIDEA be
required by law to help develop industry in Alaska.
1:38:41 PM
SENATOR DUNBAR answered no it would not be a legal requirement.
SENATOR GRAY-JACKSON said AIDEA can already help, but this bill
would make it law. She mentioned her own bills; while the agency
already had authority, putting it in statute ensured there was
no choice.
SENATOR DUNBAR answered SB 14 would not force AIDEA to make any
of those decisions. He stated that there is some vagueness about
whether the list of permitted activities is thorough. He said
housing development fits under current powers and past actions
support that. SB 14 removes any doubt.
1:40:14 PM
CHAIR BJORKMAN stated that some people worry SB 14 could compete
with the private financing market. He asked if that was a
concern.
1:40:28 PM
SENATOR DUNBAR answered he has spoken with private financers
that have said typically multifamily housing arent getting
financed; it's hard to make the numbers work. He stated that in
Anchorage the only major workforce housing developer is Cook
Inlet Housing Authority, which relies on layered tax credits. He
stated that SB 14 couldn't compete with private financing.
1:41:29 PM
SENATOR YUNDT stated that the more options in the market the
better. He asked if AIDEA had shared any preliminary guidelines
on how it's plan would differ from Housing Finance Companies
(HFCs). He opined the plans are too similar, the bill might not
solve the problem.
1:42:17 PM
SENATOR DUNBAR answered AIDEA has not. He agreed that comparing
preliminary guidelines is a great idea and that both groups
believe AIDEA can offer tolls AHFC currently doesn't or can't
offer.
1:43:05 PM
CHAIR BJORKMAN announced invited testimony on SB 14.
1:43:15 PM
ANNA BRAWLEY, Assembly Member, Anchorage Assembly, Anchorage,
Alaska, testified by invitation on SB 14. She paraphrased the
following written testimony:
[Original punctuation provided.]
I'm speaking today as an Assembly member for West
Anchorage, a strong advocate for building housing to
meet our community needs, and a policymaker who is
very focused on local housing action. While I am not
speaking on behalf of the Municipality on this bill,
housing is one of our legislative priorities, and in
line with our overall requests to the State regarding
housing financing (see excerpt below these comments).
I urge your support for SB14.
The Municipality (MOA) is very focused on spurring
housing production, and what we can do at the local
level: cutting red tape, removing barriers,
incentivizing new housing, and making local
investments in affordable housing. The Assembly's
Housing Action and the Mayor's 10,000 Homes in 10
Years Strategy both speak to actions we can take
locally, and we continue making local policy changes
to make it easier to build. The short version: we are
doing everything we can, with the limited levers we
can pull, particularly for small-scale projects like
duplexes and 4-plexes, which the market is trying to
produce and runs into local barriers. It is also
important to understand and acknowledge that while
Anchorage may have more tools at the local level, many
communities with equally dire housing needs are facing
cost and feasibility challenges and have fewer options
to solve these issues on their own.
I've spent a lot of time working with builders and
developers, housing organizations, and people who
specialize in financing, engineering and
infrastructure policy to really understand what the
challenges are, and what needs to be done locally, and
at other levels. This informed our local housing work
and helped me understand what is most needed at the
state level: Infrastructure (meaning water and sewer,
roads, etc.) and Financing (helping make projects
economically viable, where the market isn't producing
them on their own).
1:45:32 PM
MS. BRAWLEY continued with their testimony.
It is also important to think about the different
segments of the housing market, what the market is
already producing and where local action is needed,
and what types of housing the private sector struggles
to provide in feasible way, even as it continues to be
what our communities need. Some types of housing are
getting built, like single family homes; others can
get built as we get local barriers out of the way,
like more 4-plexes; and other housing, particularly
medium- to large-size projects, simply don't pencil
for the private sector without additional investment
or financing options.
Since at least 2012 (documented in an MOA housing
study), multi-family housing has been one of our
biggest needs but is not economic to build in
Anchorage without either direct subsidy or other
incentives. It is also important to consider the fact
this means both rental housing (apartments), and
housing for sale (condos), and all 2 of these are very
needed to meet residents' housing needs. Rental
housing is workforce housing, and only a very few
developers in our community even work in this market.
Condos can be starter homes for young adults, and
downsize options for empty-nesters and older adults,
but we aren't seeing these built anymore.
Outside of Anchorage, the challenges of cost, supply
chains, infrastructure costs and needs, and other
factors in most regions of the state mean these types
of housing are very much needed, and not getting
built. Having more financing options to complement the
private sector, particularly in communities with a
limited real estate market, is one piece of the puzzle
we are all collectively working to solve, to build
more housing in Alaska.
1:47:27 PM
RICHELLE JOHNSON, Director, Research and Technical Assistance,
University of Alaska Center for Economic Development, Anchorage,
Alaska, testified by invitation on SB 14 and read the following:
[Original punctuation provided.]
At CD we're often called to provide data as context
for policy makers, considering our state economic
challenges and housing is very clearly one of the
growing areas of importance when it comes to economic
development for many of the communities that we work
with. I know that it's not news that housing
affordability and availability is and has been a
challenge for Alaska for decades. And the data shows
that almost every area of the state is struggling to
construct affordable housing to meet demand. And that
need has only grown over the years.
Housing cost and availability is listed as a primary
concern in most of the economic development strategic
plans across our state, where many communities are
experiencing housing constraints which ultimately
impact variability to attract and retain workers and
residents in their communities. As of last year,
Alaska ranked 45th in terms of new housing unit
construction per 1000 residents. And this is a new
challenge for the state where we have seen the number
of new housing units constructed decreased by 30
percent over the last decade, despite the price of
housing increasing and seeing clear demand signals and
needs for new housing.
In the world of multi-family housing specifically, new
development has slowed even more with construction of
new units in 2023 at about half of what it was a
decade previously.
These trends show a very clear demand for housing that
is not translating necessarily to increase to
development. And it indicates that traditional
commercial development tools have not been enough to
spur housing construction that's needed across the
state. This is key for Alaska's economy because
housing is tied to our workforce and the workforce is
tied to the state's economic health, with many of the
economic activities that we see on the horizon for the
state coming towards us and new development.
It's very clear that we may certainly see an influx of
workers coming from out of state. And we already know
that through many anecdotal reports that workers
coming to work in our state do experience a lot of
struggles finding housing, affording housing when they
are seeking to move here. That's not on top of what
our residents are already experiencing themselves. We
know that housing is a significant limiting factor
when we're looking at relocation. And it's even a
greater challenge in more rural areas where we see
reports of vacancy rates for rental housing that are
well below the national average of 70 percent.
Kodiak specifically has the tightest housing market
with a 3.3 percent vacancy rate. The bill being
discussed today takes a clear step towards enabling
more construction of deeply needed housing,
specifically multi-family housing. As Senator Dunbar
mentioned, it is a very simple, straightforward step
that really just gives developers another tool in
their toolkit to improve the margins on housing
development. They're sort of on the cusp of financial
feasibility.
AIDEA loans provide developers with a source of
patient capital that commercial financing would not
enable. The AIDEA loan participation would allow
having developers to spread the cost of financing over
a much longer period of time than traditional
commercial loans to and free of cash flows for
developers. As stated, sort of these little
incremental steps to improve financial feasibility
don't solve the whole picture, but they can
potentially help stimulate new construction and move
us towards that goal. In enabling our state employers
to retain their workers, attracting new workers, and
operate at full capacity.
1:52:59 PM
SENATOR YUNDT asked Ms. Barnes to discuss the relationship
between AIDEA and AHFC and share her thoughts on how it might
function.
1:53:18 PM
STACY BARNES, Director, Government Relations and Public Affairs,
Alaska Housing Finance Corporation (AHFC) Anchorage, Alaska,
answered questions regarding SB 14. She said the role of AHFC is
to ensure Alaskans have access to safe, quality, and affordable
housing; a mission the corporation has pursued for over 50 years
through various programs. AHFC supports multifamily housing
through federal low-income housing tax credits, state and
federal grant programs, and developer loans. She stated AHFC may
partner with AIDEA. AHFC will help with initial construction
costs and AHFC will provide long-term financing.
1:55:41 PM
CHAIR BJORKMAN held SB 14 in committee.